Thursday, August 21, 2008

Incentive Ideas

This is an excerpt from an article written by Kristin Zhivago for Marketing Profs on how to incentivize customers to buy, particularly at a time when customers may delay their purchases as long as possible.

10 Great Incentive Ideas

1. Offer financing or leasing

Finance the purchase, with low interest. This changes the budget impact, and helps make it possible for the champion to justify the expenditure to Finance and management.

2. Throw in additional services or products if they buy by a certain date.

This type of incentive is working well right now. Additional services or products are anything they would normally pay for that "goes with" your product or service.

3. Make a promise related to after-the-sale activity

As I mentioned before, you can guarantee that the company will be "up and running" by a certain date, or they will get a special deal as compensation. Make sure that you and the customer agree on what "up and running" really means. Or, offer VIP, 24/7 service, and priority support.

4. Use free trials or pilots to help them absorb the product or service in small bites

If the "whole thing at once" is too much for them to bite off, break it down into smaller pieces. This is another incentive that eases the budget burden.

5. Offer services for a reduced price or for free, during the times when your people aren't fully utilized

If your sales tend to drop off during a particular time of year, rather than having your service people trying to look busy, encourage the customer to buy during the slower period—and give him a nice discount on those services.

6. Pre-stock the "supply cabinet" when they buy the first time, but only charge them for your products when they use them

You sell 100 laser printers to a company. They will also need cartridges. Offer to sell them a year's supply, at a set discount price, but don't actually bill them for each new cartridge until it is taken from your "supply cabinet."

It doesn't matter if you have a real supply cabinet on site, if your rep refills a supply cabinet each week at their site, or if you get them dropped shipped from another vendor—the point is, they are going to get cartridges from you for the next year, and you won't charge them until they actually place an order for a new cartridge. This helps them get the volume discount without paying in advance for inventory and ensures that you will get their cartridge business for the next year.

7. Quantity discounts

This seems obvious if you're selling a product, but you might want to consider it when selling services as well.

8. Lock the price

Let's say you're selling something that is prone to price increases, because the costs you have to pay keeps going up (such as fuel costs, material costs, etc.). Offer to lock in the price for a given period of time if they make the initial purchase now.

9. Offer to pay for an associated product

"Buy this car now, we'll pay for the next three years of your gas."

10. Create a rewards or points program

Keep it as simple as possible, with as few conditions as possible. "Fly 16 times, get one flight free," is more compelling than "Earn a certain number of miles with each trip, apply those miles to other trips, depending on where those trips are going to or from, and except during blackout dates."

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